In Punjab, the stamp duty on REIT property purchases has been reduced from two per cent to 0.5 per cent. On property sales, the duty has been cut from two per cent to one per cent, the SECP said on Saturday.
In Sindh, the stamp duty on property purchases has been reduced from three per cent to 0.5 per cent and on sales it has been brought down from three per cent to one per cent.
In both provinces, the registration fee on purchases has been completely waived and on sales the fee has been reduced from one per cent to 0.5 per cent.
The SECP said that it has been pursuing the case of reduction of duties and taxes on REIT properties since introduction of a regulatory framework in 2008.
Under the Income Tax Ordinance, REITs already enjoy tax-pass-through status upon distribution of at least 90 per cent profits among their unit-holders. In addition, the sellers of property have also been provided substantial tax incentives under the tax laws.
“We expect that the friendly tax regime coupled with recent improvement in the regulatory framework will provide necessary impetus for the launch of REITs,” the SECP said.
“These measures are likely to encourage transparency in deals and a better price mechanism in the real estate market which would ultimately lead to an increase in revenue of respective governments and land authorities,” it said.
Published in The Express Tribune, January 23rd, 2011.
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